Introduction to Prospect Legal

Prospect Legal is a premier insolvency and restructuring law firm with 15+ years of expertise in representing financial institutions, banks, and secured creditors under the Insolvency and Bankruptcy Code (IBC), 2016. Our team of seasoned attorneys specializes in enforcing security interests, navigating the Corporate Insolvency Resolution Process (CIRP), and maximizing recoveries for creditors. From securing interim moratorium relief to challenging undervalued transactions, we ensure creditors’ rights under Section 52 of the IBC are upheld while balancing compliance with tribunal mandates.

Where You Can Find Remedies?

Key forums for enforcing security interests include:

• National Company Law Tribunal (NCLT): Adjudicates claims under CIRP and approves resolution plans.
• Debt Recovery Tribunals (DRTs): Enforce mortgages and secured assets under the SARFAESI Act, 2002.
• NCLAT (National Company Law Appellate Tribunal): Hear appeals against NCLT orders.
• High Courts: Address writ petitions for urgent injunctions or constitutional challenges.

Struggling to enforce security interests? Contact Prospect Legal to safeguard your rights and recover dues efficiently.

📞 Call us at 7000-12-7225

Understanding the Legal Process

Voluntary Process (Out-of-Court Enforcement):

1. Direct Asset Takeover: Invoke SARFAESI Act powers to seize secured assets without court intervention.
2. Negotiated Settlement: Engage in one-time settlements (OTS) with debtors to recover dues.
3. Private Sale of Assets: Sell secured assets privately with debtor consent.

Compulsory Process (IBC-Driven):

1. Initiate CIRP: File under Section 7 (financial creditors) or Section 9 (operational creditors).
2. Moratorium Management: Navigate asset freeze under Section 14 while asserting security rights.
3. Committee of Creditors (CoC): Vote on resolution plans or opt for liquidation under Section 53.
4. Liquidation Proceeds: Claim priority in distribution under Section 52.

Legal Protection Under Key Provisions

Section 52 of the IBC: Enforcement of Security Interests

• When Can a Claim Be Filed?
  • If the secured creditor opts to enforce security outside liquidation (bypassing Section 53).
  • If the security interest is registered and legally enforceable.
  • When the creditor notifies the liquidator/resolution professional (RP) of their election.

Section 60 of the IBC: NCLT’s Adjudicatory Powers

• Powers of the Adjudicating Authority (NCLT):
  • Stay enforcement actions during moratorium.
  • Approve or reject resolution plans affecting secured creditors.
  • Adjudicate disputes over valuation of secured assets.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Risk Assessment

• Security Audit: Review mortgage deeds, charge registrations, and collateral valuations.
• Default Analysis: Scrutinize loan agreements and default triggers under Section 3(12) of IBC.
• Recovery Strategy: Decide between SARFAESI, IBC, or OTS for optimal recovery.
• Exposure Assessment: Estimate potential losses in liquidation vs. resolution scenarios.

Step 2: Legal Documentation & Filing

• Draft Section 7/9 applications with proof of default and security documentation.
• File interim applications to exclude secured assets from the moratorium.
• Prepare objections to undervalued resolution plans under Section 30(2).
• Submit claims with the RP, emphasizing security interest priority.

Step 3: Compliance & Negotiations

• Negotiate with CoC to enhance secured creditors’ payout in resolution plans.
• Challenge avoidance transactions under Section 43–45 to recover diverted assets.
• Represent clients in NCLT hearings to enforce SARFAESI rights during CIRP.
• Coordinate with RPs/liquidators for asset valuations and inspections.

Step 4: Resolution & Final Actions

• Enforce security interest via asset sale or takeover post-NCLT approval.
• Monitor liquidation proceeds to ensure priority under Section 52.
• Appeal adverse orders to NCLAT or Supreme Court under Section 62.
• Conduct post-recovery audits to strengthen future lending practices.

For expert legal representation, reach out to Prospect Legal now.
📞 Call us at 7000-12-7225